Oil prices fell to fresh April lows on Friday as slowing economic growth threatened to worsen ongoing oversupply of crude and refined products.
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In morning deals in London, Europe’s main contract Brent North Sea crude slid to $41.83 – the lowest level since April 18.
Oil prices are still up more than 60 percent from 12-year lows of around $27 a barrel hit by Brent and about $26 struck by USA crude in the first quarter.
Trade group American Petroleum Institute (API) said after the market’s settlement that US crude stockpiles fell by 827,000 barrels last week, compared with analysts’ expectations for a drawdown of 2.3 million barrels.
“We still see a gradual and orderly price decline going forward well into next month, with WTI values falling at an average weekly pace of around $1.25 a barrel”, said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
On Wednesday the U.S. government’s Department of Energy reported the first increase in USA crude stockpiles since May.
Gasoline RBc1 was slightly higher at $1.3358 a gallon.
Raymond James had the highest 2016 Brent forecast at $53.15 per barrel, while the Economist Intelligence Unit had the lowest at $40.34.
“Higher inventories suggest either a lack of demand or an increase in supply, and the latter seems more plausible at the moment”.
“We’re now heading toward the end of the drive season and the market is probably going to weaken further”.
“Expectations of tighter supply-demand balance on the market seem to be evaporating”, added Gene McGillian of Tradition Energy. Gasoline consumption averaged about 9.8 million barrels per day, up 2.6 percent from a year ago.
But the rise in recent months has led them to reopen the rigs as they become more cost-effective.
Brent for September delivery shed 62 cents to $42.08 per barrel. At that, Brent was at the level of $44.87 and WTI at $42.92 a barrel.
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This post was syndicated from The Guardian NigeriaThe Guardian Nigeria.
